The Tax Conference Committee met yesterday evening and put together yet another plan to bridge the budget gap of more than $400 million.

This plan includes two bills – HB 2109, the bill barely passed by the Senate, and SB 270, a “trailer bill” intended to address some of the concerns of the House. Both bills will have to be passed to enact the tax plan.

There were essentially three House concerns: the property tax cap on cities and counties needed a little more flexibility, the plans on repealing sales tax exemptions needed to have a few more that were not to be under review (schools and non-profit hospitals among them), and the voucher program need to require that students would attend an accredited school. They also wanted to keep the food sales tax credit for the poor.

The Senate agreed to all of the House concerns except the voucher requirement. Apparently Senate Republican leadership does not believe school accreditation is a good thing.

The plan then was to run SB 270 in the House, pass it and send it over to the Senate. The House would then take up HB 2109 while the Senate voted on SB 270. The House, if it passed HB 2109, would not send it to the Senate until the Senate had actually approved SB 270. In this way, if the Senate did not approve SB 270, HB 2109 would never go back to them and so the plan would essentially be dead.

The House had a relatively short debate on SB 270 and passed it with a vote of 66 to 49. Attention then turned to HB 2109.

Debate was pretty intense on this bill and when Tax Chairman Kleeb closed on his motion to adopt the conference committee report, the ayes came up short – the initial vote was 44 to 71, 19 votes short of the 63 required for passage.

A call of the House was enacted. The goal of this is to try to bring in as many of the missing Representatives as possible and then work to persuade others to change their votes to aye.

But Representatives were not interested in changing. At least initially. The call was going on for a long time. It was reported that Rep. Goico was on his way from Wichita.

The first change of vote was Rep. Kasha Kelley, going from aye to nay; she was followed shortly thereafter by John Bradford. The tally stood at 42 to 73 for a long time.

Shortly before midnight, the issue of the “Rubin Rule” was brought up. Under the Rubin Rule, the House may not work between the hours of midnight and 8:00 am unless they vote to do so. Rules Chair Barker told the body that they could simply stop for the night and reconvene at 8:00 continuing the call.

Once that announcement was made, the votes rapidly changed from aye to nay until the tally stood at 29 to 86. At midnight, Speaker Pro-Tem Peggy Mast announced they would hit the pause button and return at 8:00 to continue this call of the House and vote.

The Senate, not having yet taken up SB 270, was in caucus debating what to do next with some arguing that they should vote to send a message to the House. Others urged Senators to start calling their House counterparts, urging them to vote aye.

But in the end, Senate leadership simply decided to go home for the night and reconvene today at 10:00.

So there you have it. The House goes in on day 112 to continue a call of the House on HB 2109; the Senate goes in later to see what the House finally does.

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This morning the tax conference committee met and produced two similar tax bills, deciding to keep things going in both chambers simultaneously in the hope that some plan can tax somewhere.

HB 2109, which had been debated for a while last night in the Senate, was tweaked and sent back to the floor.

Debate was somewhat heated this afternoon with Senator Holland suggesting that they could get their work done if the special interests would just leave the building. He particularly called out the Kansas Chamber.

In the end, the bill, like others before it went down in flames, failing on a vote of 5 to 34. The bill was then sent back to conference.

Immediately afterwards, the Senate voted 39 to 0 to concur in House amendments to SB 11. This bill declares all state employees to be “essential” meaning that, if the Governor signs it, the furloughs are off. Unfortunately, they can work but are not necessarily going to get paid. They will, however, be able to file a claim against the state for wages.

Sometime this evening the House will take up SB 270, a tax bill very similar to the one just killed by the Senate. SB 270 also includes the tuition tax credit expansion.

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The Tax Conference Committee came up with an agreement yesterday afternoon, putting it in SB 270 and sending it off to the House floor for a motion to adopt the report.
The agreement contained most of the provisions that each chamber had in their respective bills.

The tax amnesty plan,

The restoration of a property development tax credit,

The extension of the sunset on rural opportunity zones,

Permission to raise local sales taxes in three counties, and

A fire district property tax clarification.

The Christmas tree farmer tax break,

SSN required for tax credits,

Increasing the sales tax to 6.65% on July 1 then dropping the food sales tax to 5.9% on Jan. 1, and

Changes in the “march to zero” – slowing the rate reductions and repealing the formula that mandates further reductions after 2020.

Set aside were provisions to:

Repeal the alumni association property tax exemption,

Requiring KDOR to send motor vehicle registration letters,

Ending “double dipping” on sales tax exemptions, and

Capping local property tax increases.

The full House took up the bill when they reconvened at 5:00.

The discussion was intense and it became clear pretty quickly that the bill was in trouble. The bill is essentially the Governor’s plan with a few additions. Of course, the Governor opposes stopping the march to zero.

When Tax chairman Marvin Kleeb closed on his motion to adopt, the vote board lit up with red NO votes. The initial count was 6 to 105. Reps. Peggy Mast, Jene Vickrey, and Ramon Gonzalez changed to NO leaving only Kleeb, Gene Suellentrop (Tax Vice Chairman), and Steve Huebert. The final vote was 3 to 108.

The conference committee met again at 7:00 but only to agree to come back today at 9:00. This morning, the 9:00 meeting was postponed until 11:00.

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It was a real surprise when the House adopted the conference committee report on SB 112, the budget that still needs $400 million in additional revenue to balance, without any discussion.

Chairman Ryckman explained the bill and Speaker Pro Tem Peggy Mast asked if there was discussion and then quickly announced that seeing no one, Ryckman could close on his motion to adopt the report.

The report was adopted on a vote of 64 to 48.

Democrats called foul, noting that Rep. Sharon Schwartz (R-Washington) had her light on, an indication that she wanted to speak, but was not recognized. Democrats had planned to speak at length about their concerns.

The report now goes to the Senate for their consideration. That is likely to happen today. If the Senate also adopts the report, it goes to the Governor. Of course, they can vote it down and then consider HB 2135, the budget that balances by cutting 5.7% from all agencies. This would be a $181 million cut to K-12 education.

Tax Conference Committee Meeting

With the passage of SB 270 in the House and HB 2109 in the Senate, there are now two tax bills in conference. The. Only similarity is that they both contain the tax amnesty plan.

The House bill (SB 270) also contains:

The restoration of a property development tax credit,

The repeal of the sunset on rural opportunity zones,

Permission to raise local sales taxes in three counties, and

A fire district property tax clarification.

The Senate plan (HB 2109) also contains:

The Christmas tree farmer tax break,

SSN required for tax credits,

Repeal the alumni association property tax exemption,

Requiring KDOR to send motor vehicle registration letters,

Ending “double dipping” on sales tax exemptions,

Capping local property tax increases, and

Cutting the food sales tax to 5.7% on Jan. 1.

At the first conference committee meeting, House Chair Marvin Kleeb indicated that the House had some interest in the Senate positions but also concerns with the property tax cap. They agreed to meet again at 11:00 today.

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Yesterday we watched the Senate debate and destroy a tax plan, ultimately voting 1 to 30 to kill it.

Today we learned that the House had their tax bill – SB 29 – up for debate. Apparently mindful of the events in the Senate, it was decided that the House would gut SB 29, put only the tax amnesty program into it and pass it out on emergency final action. If successful this would put a bill in conference that had just one provision that touched on most sources of taxation. The conference committee could then craft a new plan which would be subject to simple up or down votes in both chambers. No amendments could be offered.

If they did things right, the bill could be rejected and sent back to conference where a new agreement could be assembled and run up the flagpole.

Before debate could take place they had to manage a procedural vote allowing them to move the bill up for debate and emergency final action.

That motion was made and on a division vote got 72 yes votes to 40 no votes. A motion of this type takes a supermajority of 84 votes so the motion failed.

Legislators gathered on the floor and the chamber stood at ease for some time. It appeared that there might be an effort to call for a reconsideration and try again to get the bill up for debate and a vote. But when it became clear that the votes were not there, the body was adjourned until 9:00 tomorrow morning.

House Tax Committee Makes Plans for Tomorrow

After the failure to move SB 29, the House Tax Committee got together to talk about the next steps.

It was agreed that they would bring SB 270 (another tax bill) up on the floor and open it up to amendments and a full-blown tax debate.

Representatives Rhoades and Brunk both suggested amendments they might be interested in trying and the Committee adjourned for the day.

Anyone Have Weekend Plans?

Well, apparently not legislators or lobbyists! Senate President Susan Wagle told the Senate to hold on to their hotel rooms. She hopes to keep going through the weekend and get this show wrapped up.

Similar talk is happening in the House.

It’s hard to imagine a scenario in which things get finalized over the next three days given the multiple factions in both chambers and the degree to which each faction has decided what they will and will not fall on the sword over.